Quick links: Denver’s January inflation rate | Colorado jobs reports | Home sales update | Colorado women pay equity | More economy stories
Chances of a recession in Colorado this year? Unlikely.
That’s according to the short-term economic forecast shared this week by the Colorado Futures Center at Colorado State University.
Sure, the state’s unemployment rate is low and inflation has slowed in the past year, but those factors aren’t what the quarterly ColoradoCast forecast uses when predicting how the local economy will behave in the next four to six months. Instead, it looks at the number of temporary workers, new weekly unemployment claims, Denver housing values, stock markets and the difference between corporate and government bond yields.
“There’s a lot of theory that suggests the temporary employee market will move before the permanent employee market,” said Phyllis Resnick, founder and lead economist of the Futures Center. “It’s easier to hire or fire a temporary person than it is to take on a full-time employee so it’s often seen as a leading indicator of economic performance.”
Right now, that data point is neutral, which still has an impact on whether the ColoradoCast is predicting growth or not. For the first half of 2024, the model suggests modest economic growth of 2%, which is slower than the nation and past years of growth coming out of the pandemic.
But what else goes into the prediction? Resnick shared more of the behind-the-scenes thinking. After testing the model for a few years before the pandemic, she settled on the aforementioned local sources plus the Case-Shiller Housing Index for Denver, the Wilshire 5000 stock index and bonds. Those sources help model the annual growth rate for the next six months.
Home prices were the big source of economic growth in 2022 when the model predicted 4% to 5% growth, but now that indicator doesn’t have much impact as for-sale home prices have cooled. For the next two quarters, investments are having more impact because investors have returned to corporate markets, hence the model predicts “modest growth” of 2%. She explained that ColoradoCast looks at the difference between safer government bonds versus the riskier corporate ones.
“When that spread gets wide,” she said, “it tends to be a leading indicator of some future economic disruption because the bond markets are telling you that people are nervous about the corporate situation so they want higher returns. … We’re seeing that spread essentially narrow.”
Similarly, the Colorado Business Economic Outlook, shared in December by the University of Colorado Leeds School of Business, also forecast slower growth but no recession in 2024. But there were still concerns, including whether the commercial real estate industry would improve. Overall, economists were less optimistic than they had been a year earlier.
Resnick said economic growth often correlates with employment, so one takeaway for Coloradans is that this translates into more job security at least for most industries.
“On average, what it means is that it’s good news that we’re not at risk of a recession,” she said. “But having that slightly more muted growth, in light of inflation that’s still running a little bit higher means that this isn’t translating into wage growth so this could still feel like a time of challenge even with the economy continuing to grow.”
Colorado inflation, job cuts, housing and other economic reports
Here’s the roundup of recent economic reports that impact Colorado. We’re always looking for feedback from real people about how the data translates into reality so please share your story and comments with tamara@coloradosun.com.
Denver inflation rate drops to 3.5% in January. That’s attributed “almost entirely to falling gasoline prices,” according to Michael Hirniak, assistant commissioner for regional operations at the U.S. Bureau of Labor Statistics. Prices in the Denver area may not be growing as fast as in the past, but at 3.5% higher than a year ago, there’s still inflation.
Since November, categories with the highest price increases are electricity, up 3.4%, grocery shopping, up 1.5%, and fruits and vegetables, up 2%. In the U.S., January’s inflation rate was 3.1%, which was higher than anticipated and caused markets to drop on the news.
While BLS doesn’t provide a statewide inflation rate, local economists say they rely on the Denver data to come up with a state rate. They also use the West Region rate, which includes California, Utah and 11 others. January inflation in the West was 3.3%, down from 3.6% in December. >> Details
➔ Wall Street Journal Inflation Tracker. At 3.1%, see the items keeping prices high, the business news publication reports. Spoiler: Blame frozen noncarbonated juices, car insurance and the repair of household items. Costs of those items have increased more than 18% from a year ago. At least egg prices are down 28.6%. >> Read
Jobs reports
Fewer Coloradans lost or left jobs in December. The monthly Job Openings and Labor Turnover report just came out and for separations in December, Colorado had the third largest decline nationwide compared to November. That means any sort of voluntary or involuntary separation from a job, such as layoffs, firings and quitting (but not retirements).
Keep in mind, Colorado had more job cuts in November than most other states so that could indicate employers took the month off for the holidays and may be getting closer to where they want to be. There were also fewer job openings in December, dropping 17,000 to 207,000, which still leaves two openings for every unemployed Coloradan. >> JOLTS
More Colorado homeowners put their properties on the market in January. After sitting out for months or even years, thousands of Colorado homeowners decided January was finally a good time to sell, even if it meant giving up a low-mortgage rate.
In Colorado, for-sale home listings increased 12.8% in January from a year ago, according to the Colorado Association of Realtors. The Denver metro area saw a 16.5% rise. And in Boulder County, new listings jumped 41%, said Kelly Moye, a Boulder/Broomfield Realtor. She cited optimism that interest rates will change (they’ve gone up in February) or they just had to move. “Many of those listings were gobbled up quickly with 32% more sales than the prior January,” she said in the CAR update.
The number of new listings — 5,355 in the state and 3,028 in Denver — are still below the peak. In June 2022, the number of houses that went on sale was 12,500 in Colorado and 7,400 in Denver. >> See data
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Sun economy stories you may have missed
➔ Denver has helped 40,000 migrants while Colorado Springs counts 24 families. Does being a sanctuary city matter that much? Reporter Jennifer Brown compares population and economies of the two cities and interviews the organization that served the 24 families: The Salvation Army in Colorado Springs. >> Read
➔ Colorado AG sues to block Kroger-Albertsons grocery store merger. After hearing from farmers, politicians, unions and residents, Colorado AG Phil Weiser followed Washington state’s lead to block the merger between the parents of King Soopers and Safeway because he says it violates the state’s antitrust laws. >> Read
➔ A little worm destroyed last year’s sweet corn crop. Here’s how Colorado farmers are fighting back. Tuxedo Corn and other growers around Olathe have been working on a trio of responses to try to thwart — or at least slow down — the corn earworm. >> Read
➔Defunct alt weekly newspaper Colorado Springs Independent has new owners. Longtime Colorado Springs businessmen J.W. Roth and Kevin O’Neil bought the paper about a month after it went dark amid overwhelming debt. >> Read
Other working bits
➔ Women’s earnings are now 87% of men in Colorado. Full-time female workers in Colorado had a median pay of $1,142 per week in 2022, or 87% of their male counterparts, according to a new BLS report based on 2022 data. That had dipped in 2020 during the start of the pandemic but the rate is at its highest ever. It’s also much closer to parity than the low in 1997 when women-to-men earnings were 74.6% in Colorado. >> Report
➔ Up to $10,000 in rent assistance available. There’s $30 million available to help Coloradans who are struggling to pay rent and facing eviction. The Temporary Rental Assistance Grant portal opened Thursday and there are restrictions as to who can apply — only Colorado residents with valid rental leases and who’ve experienced a major event that impacts their ability to pay. There are also income limits where household income cannot exceed 80% of the local area’s median income (check here). Up to $10,000 or five months rent is available. For those facing imminent eviction, call the Department of Local Affairs at 720-356-0174 or 888-480-0066 for help. Sun reporter Tatiana Flowers has more details. >> Story, Apply
➔ Basic Income Project pays out another $300,000. A yearlong experiment to provide money with no strings attached to more than 800 people experiencing homelessness was extended for six months. On Thursday, the Denver Basic Income Project began distributing cash to existing participants to help provide economic sustainability but also for research purposes. University of Denver’s Center for Housing and Homelessness Research found that after the first six months, 30% to 40% of the participants were still living in a home or apartment they rented or owned and fewer were sleeping outside. >> Earlier story
Thanks for sticking with me for this week’s report. Remember to check out The Sun’s daily coverage online. As always, share your 2 cents on how the economy is keeping you down or helping you up at cosun.co/heyww. ~ tamara
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What’s Working is a Colorado Sun column about surviving in today’s economy. Email tamara@coloradosun.com with stories, tips or questions. Read the archive, ask a question at cosun.co/heyww and don’t miss the next one by signing up at coloradosun.com/getww.
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